Here’s How Much You Need Each Month To Save $100K In Singapore

Why is your first $100K so important?

Nothing beats the feeling of having a six-figure sum in your bank account for a start (you can work towards a seven-figure one from there).

Here are 3 good reasons:

Practical: This is around 1/4 of what you need for any Singaporean financial life of around $422k (HDB, Marriage, Renovation, First Kid etc.) This also gives you your emergency funds buffer

Motivational: This gives you a target to work towards thus more motivation to move beyond $100K

Habitual: Your lifestyle and habits would have been tilted towards a more financially savvy one. This includes higher saving rates, better budgeting strategies or regular investment set up

TL;DR: Your strategy to reach your first $100K

Understand your Timeframe: If you know what time period are aiming towards (eg. 5 years, 4 years or 3 years) and subsequently which financial products you need

Understand Risk and Return: DIY or Active Funds may give one higher returns, but you will have to consider the risk appetite and investment knowledge before investing in them

If you choose a deposit account at 0.5% return p.a: It willbe challenging to hit $100K just by savings alone as you will need over $1.7k monthly

If you invest in an ETF at 6% return p.a: You can hit $100K in 5 years with $1.4k of channeling to investments

Common investment products in Singapore

We write more in detail regarding this chart you see below in the products and various interest rates to beat inflation. But for the sake of this article, we will be focusing on sharing the different products you can use to actually reach that $100k and what timeframe is required 🙂

How much do you need to set aside each month to reach your first $100K?

To break it down into how much you need to save each month to achieve your target within certain years, we lay out two assumptions:

One saves/invest a fixed amount every month

Constant annual returns % per annum

As mentioned, we peg returns % to various financial products which Singaporeans are more familiar with (eg. SSB with 2.0% returns)

Further Reading: A Median Singaporean

Is it possible to save $100K in LESS than 5 years?

Assumptions Taken:

Starting with $0 savings

Looking at a 2% annual return

Aims to save $100K in 5 years

Yes, it can be done!

As seen from the table above, this can be attained by setting aside $1,586.11 each month into the Singapore Savings Bonds, leaving him with $1,213.89. Assuming a young working adult with little commitment, the amount is potentially attainable.

The calculation above also DID NOT take into account:

Possible year-end and performance bonus

Any possible IPPT award money (for guys) or possible GST Voucher

Possible pay increments over the years

All the above factors can help one increase the possibility of reaching his $100K milestone.

Here are some additional articles that can help you achieve your $100K goal: